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Comment by ajbonkoski | Hacker News Reader

Stopped reading at:

"In the past week or so, fortunes have reversed. Technology stocks have sold off. Value stocks have rallied, as prospects for a coronavirus vaccine raise hopes of a quick return to a normal economy. This might be the start of a long-heralded rotation from overpriced tech to far cheaper cyclicals—stocks that do well in a strong economy. Perhaps value is back."

Haha. No. It's not back.

Over the past YTD, AAPL has returned 70%. The article's publish date is 11/14/2020. Around that timeframe, AAPL moved less than 5%. This is not evidence for collective change in investing philosophy. Perhaps tech is over-bought, but you have to argue better than this. It took me all of 2 minutes to check.

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Comparing the closing price of stocks today with one year ago: TSLA +900% AMD +250% ETSY +400% PTON +350% AAPL +200%

Enormous gains. The article should really have more data to describe this pullback.

That's insane. Of those stocks only the growth of AMD is justified because it was starting off from a small base anyway and it is in the process of replacing Intel entirely so creeping up to Intel's market cap is not surprising.

Tesla makes absolutely no sense to me. Etsy is just an online shop and it sells a lot of crap. Pton is probably just a corona fad.

AAPL is slightly encouraging because it obviously has some well justified growth left in it but it's not overhyped to the extreme extent as the other stocks.

All stocks are still growing way too quickly in my opinion though.

And it took me all of 2 minutes to check that the last months US total market performance was +2.5% while the canonical US Value ETF, VTV, returned +4.4%. That is what they mean.

Are we really looking at a months worth of returns and trying to draw any conclusions here?

This. Value investing is characterized by "long-term performance". Looking at a single month to make this argument is kinda silly.

The article is simply noting that the growth > value trend had reversed last month and it may be the bottom of the underperformance by value.

GP chimes in that it’s a ridiculous claim because Apple is still up big YTD and hasn’t moved much recently.

That’s not a refutation of the article’s statement. Last month still MAY be the turning point, which is why I pointed out the recent outperformance of value, in contrast with what just Apple has done, which is irrelevant.

Of course we can’t conclude anything by a month’s worth of market data by extrapolating to the future. That’s why OP answering

“value may be turning around”

with

“no it’s not back”,

is incorrect, as they’re concluding growth has and will keep outperforming value.

CEOs complain about short term investors measuring results in quarters, and here you are giving them a month.

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